Wave of Russian startups makes a splash in Indonesia

Canggu, a coastal village in Bali, has become a hot spot for digital nomads. Known for its lush landscapes as well as the abundance of beach clubs, co-working spaces, and crypto hubs on its shores, Canggu is a magnet for bleisure travelers.

Many of the said nomads are app developers, crypto enthusiasts, and startup founders. They host business events that are usually casual in nature – parties included.

Canggu’s laid-back atmosphere set the tone for the launch of venture capital firm Multisig Ventures in August 2022. Forget formal attire – attendees were invited to put on their dancing shoes.

Multisig Ventures’ founder, however, is neither a digital nomad nor an Indonesian citizen. Vlad Ayukaev is a Russian serial entrepreneur whose experience includes establishing several startups in Finland.

Vlad Ayukaev / Photo credit: Pintar Ventura Group

He moved to Indonesia in 2020 and founded Pintar Ventura Group, a venture builder with a mission to develop fintech projects that help digitalize MSMEs. Now, he’s formed Multisig Ventures with two colleagues and plans to raise a fund of up to US$15 million to invest in Web3, gaming, fintech, and edtech startups.

“We decided to create a new managed fund focusing on Web3, specifically decentralized finance and blockchain infrastructure,” Ayukaev told Tech in Asia on the sidelines of the fund’s launch.

Foreign startups based in Indonesia or local startups established by foreigners aren’t new. Before the influx of Russian entrepreneurs, for example, the country was a battleground for Indian startups.

But Ayukaev says that Indonesia has become one of the major markets that Russian founders have been eyeing. He claims that in the next few years, there will be dozens of Russian startups coming to Indonesia, ranging from edtech and fintech companies to SaaS firms offering B2B solutions.

“Russia is famous for its tech developers. But the market is small, and the dynamics are different [than in Indonesia]. Not many startups have listed in the local stock market,” he explains.

Of course, there’s the matter of the Russia-Ukraine war. While the war has made everyone’s lives difficult, Ayukaev says it’s not the main reason why Russian founders have their hearts set on starting up in the Southeast Asian nation.

For the sake of expansion

Data shows that the number of Russian VCs investing local companies has slowed in the past three years. Indeed, the first “Russian wave” in Southeast Asia happened in 2015 when the Eurasian country’s VC firms started pouring funds into the region’s startups.

For a majority of Russian firms, though, Europe and Latin America were the main destinations for expansion until the war with Ukraine broke out. This conflict led Russian business owners away from Europe and into alternative markets.

Due to the war, VCs such as Index Ventures have also halted investments in Russian firms.

Room for everyone?